3 Tips For Financial Planning After Winning A Large Sum Of Money
Winning a large sum of money is the dream of most people, but when it happens, many people mismanage their money and may find themselves worse off. If you ever win money, there are several strategies to live a nice lifestyle while making sure the money lasts as long as possible.
Invest In Professionals
Before you spend any of your money, there are several professionals you should consider as members of your financial team. These people can include an accountant, financial planner, and lawyer. Not only can these people help you with different strategies for appropriate uses of your money, but there will be other considerations, such as taxes, investments, charitable donations, and wills that must be addressed. You may also need help settling old debts and a lawyer can be helpful in determining the best strategy to pay these debts without debt collectors trying to collect more money than you actually owe. Another reason to have professionals is that it is not uncommon to face threats or civil lawsuits from people who are simply trying to gain money from you.
Plan For Your Future
You need to work with a financial planning company, such as Family Financial Partners, to determine the safest methods of investing your money and how to keep your money secure. Working with a financial planner can help you determine how much money you need each year to live comfortably based on your life expectancy. This strategy will help you gauge how much money needs to go into investments and which type of investments will give you security while having a good return on investment. Another consideration will be various immediate-access accounts, such as checking and savings accounts. You will likely need to spread your money across different accounts so each account does not have more than is protected by the bank's insurance. Other considerations that can be important for your future are any health savings accounts, college savings, or any other types of savings that are expected to be used by you or others later.
Avoid Unreasonable Spending
One of the biggest reasons people who win large sums of money often end up broke is that they spend their money indiscriminately. Splurging on a lavish lifestyle often comes with additional costs, such as large property taxes that you may be unable to afford long-term. If you have a dream house in mind or want a newly built home, there is nothing wrong with splurging on a nice home. Simply be realistic about the home you choose and its upkeep. For example, a lavish mansion seems like a dream come true, but if you find yourself showing off the space more than actually living in it, this may be a waste of money that you cannot easily sell. You also need to be careful about giving away money to friends and family. Although helping others, especially those closest to you is important, if you go overboard, you can easily go from helping people to financially supporting them and draining your winnings faster than you anticipated.
If you are ever lucky enough to win a large sum of money, being responsible and not going overboard can help your money last a lifetime.